WNET v. Aereo

This is an exceptionally busy year for Intellectual property cases at the Supreme Court, and I thought I would talk about one that is especially interesting.

Aereo is a service that lets people in New York City to watch broadcast TV for a monthly fee. There is a brief delay (ten seconds) in the signal if you want to watch a show live. Or you can just record programming through a DVR service provided by Aereo. Aereo does not pay the networks for this programming, and they claim that this violates the Copyright Act (17 U.S.C. Sec. 101(2))

The Act says that copyrighted content may not be transmitted “to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.”

A divided Second Circuit panel held that Aereo’s transmissions do not violate the section just quoted. The pane’s rationale was that Aereo is transmitting content only to a particular homes, not to the public. Why? Because each subscriber is assigned a specific (albeit tiny) antenna at Aereo’s facility. Thus, each transmission is to a single person or family. Footnote 16 of the opinion explains:

“The methodology Congress proscribed for distinguishing between public and private transmissions is the size of the potential audience, and by that methodology, the feed from Aereo’s antennas is a private transmission because it results in a performance viewable by only one user.”

With respect, I think the Second Circuit got this wrong. It seems to me the plain language of the statute does contemplate a situation where many individuals are getting transmissions of the same event “in separate places and at the same time or at different times.” And it seems odd to say, as Judge Chin notes in his dissent, that if Aereo transmits the Super Bowl live this Sunday to a million people, that this is not a public performance–it’s a million private performances.

IP law often stumbles over the problem that what is permissible for one person to do (share a CD or forward a video) may be impermissible when it is done for hundreds of thousands. The analogies just don’t make sense. And in this case, the Supreme Court should reverse and hold for the networks.

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Gerard Magliocca

Gerard N. Magliocca is the Samuel R. Rosen Professor at the Indiana University Robert H. McKinney School of Law. Professor Magliocca is the author of three books and over twenty articles on constitutional law and intellectual property. He received his undergraduate degree from Stanford, his law degree from Yale, and joined the faculty after two years as an attorney at Covington and Burling and one year as a law clerk for Judge Guido Calabresi on the United States Court of Appeals for the Second Circuit. Professor Magliocca has received the Best New Professor Award and the Black Cane (Most Outstanding Professor) from the student body, and in 2008 held the Fulbright-Dow Distinguished Research Chair of the Roosevelt Study Center in Middelburg, The Netherlands. He was elected to the American Law Institute (ALI) in 2013.

I agree the statute clearly seems to state that 1 million transmissions of a work to individuals at different places and times constitute a public performance. The difficult question, it seems to me, is whether those separate transmissions are *Aereo’s* performance, or the users’ performances. The tricky part is that it’s a user action that gets Aereo’s (and Cablevision’s) equipment to make the recording and then, either at the same time or later, transmit it. But it can’t be the case that just any service that stores and transmits audiovisual content at a user request publicly performs that content. (Even one transmission is enough to be a public performance if it is to a member of the public.) Otherwise garden-variety file storage sites are in trouble. On the flip side, I’m not sure how under the Second Circuit opinion even unauthorized video-on-demand services would infringe on the public performance right. I think there is a distinction to be made, but it is not immediately obvious.

Unauthorized VOD is easily distinguished under the Second Circuit holding. VOD is served from a single copy (or a handful of copies, for technical reasons) used to serve many users. As such, any performances _are_ to the public.

(And if a provider attempted to avoid public transmissions by making separate copies for each ordering user, then they would infringe by virtue of having made those copies. Unlike a DVR and linear channels, there is no fair use privilege to record/timeshift VOD.)

I’ll note that if the systems being located in comcast’s datacenter instead of at the users house makes a difference, it will cripple cloud computing because of the liability that the cloud datacenters would gain (they are after all providing the equipment for people to use)

Arguably this is a problem for Congress to solve by amending the statute, just as they did by adding the transmission prong in the 1970s after the Court (correctly) held that cable operators were not “performing” by “transmitting” broadcast signals.

With all due respect, the analysis above is superficial, and simply wrong. The statute does not reference “events.” It references “performances,” and that’s a huge difference.

The Second Circuit already addressed the basic argument you make (which was made in much greater detail, and with multiple variations, by plaintiffs) in both _Cablevision_ and _Aereo_, and their argument is compelling, As they observed, the transmit clause can’t be interpreted as you propose (to aggregate all performances of the same underlying work) without foreclosing the concept of non-public transmissions–which is completely antithetical to the plain language of the statute (as well as the legislative history, and Congress’s clear intent).

The legislative history suggests that Congress in 1976 probably would have intended to include the likes of Aereo among those required to license retransmission, and they clearly attempted to use language that would cover new technologies. But they didn’t anticipate this particular development, and the language that they chose isn’t broad enough to cover it.

The Court should affirm on the merits. Then Congress can step in if they see fit (and if Aereo prevails, I expect they will), and address the issue. (Hopefully, they will take the opportunity to fix the badly broken retransmission consent regime–which is the root cause of Aereo’s existence–at the same time.)

I’m not sure I understand. Let’s say I stick an extra antenna on my roof, hook it up to a DVR run a cable from the DVR to my neighbor’s TV and rent the whole setup to my neighbor. Is that an unauthorized retransmission? What if I instead put the antenna and DVR on their property?